How Does a Total Property Loss Affect My Mortgage?
For Florida homeowners, a total property loss can be absolutely devastating. As we all know, a house is more than a structure that is sitting on a parcel of land. It is a home that is filled with precious memories and sentimental possessions. Dealing with a total loss, whether from a fire or a hurricane, can take a heavy emotional toll. There are also many challenging practical questions that you will have to deal with. One issue that homeowners often have is in regards to what will happen to their mortgage. Here, our Broward County property insurance lawyers provide a brief overview of what you need to know about total property losses and your mortgage obligations.
You are Still Responsible for Making Your Mortgage Payments
First and foremost, it is important that all borrowers recognize that they are still responsible for making their mortgage payments. You should not allow yourself to fall behind on your payments simply because your property suffered damage. If you fail to make payments, you can expect that your mortgage lender will take action against you to recover money.
Your Mortgage Lender Has a Security Interest in Your Home
Next, policyholders should understand that mortgage lenders have a security interest in their home. This has several different important implications. One of these implications is that most mortgage lenders will require you to purchase property insurance for your home, for as long as you still have an active mortgage. If your property coverage lapses, your lender may even have the right to simply purchase coverage of their choice on your behalf.
In the event that you have sustained a total property loss that is covered by your insurance policy, your mortgage lender will likely also have a security interest in any settlement payment that you might receive from your insurance company. As such, you cannot simply choose to not rebuild to get out of your mortgage. Your lender will likely be able to make a claim on your settlement, if those funds are not used to build a new home.
Speak to Your Mortgage Lender Early on in the Process
Dealing with mortgage and property losses can be deeply confusing. One of the best things that you can do to bring some much-needed clarity to the situation is to speak to your mortgage lender as soon as possible after you have sustained a property loss. In the days following the traumatic event, it is a good idea to give your mortgage lender a call to let them know what happened to your property. If you run into any trouble or feel that you are being mistreated or misled, you should contact a property insurance lawyer immediately.
Was Your Property Insurance Claim Denied in Fort Lauderdale, Florida?
Our legal team can help. At Geyer Fuxa Tyler, we are proud to provide top quality legal services to homeowners and business owners throughout Broward County, Florida. To learn more about what we can do for you, please do not hesitate to contact our law firm today to request a free review of your legal case.